A Greek tragedy: timeline of the debt crisis

Rival Greek political parties were hammering out a historic power-sharing deal Monday to secure a €130 billion ($179 billion) rescue package, but markets remained wary and European leaders kept up pressure by holding back a vital bailout loan.

Socialist Prime Minister George Papandreou and conservative leader Antonis Samaras, former college roommates in the U.S, held fresh negotiations on the telephone Monday, hours after reaching the landmark agreement to form a coalition for the next 15 weeks.

Global News takes a look at key developments in the Greek debt crisis.

Oct 4, 2009: Socialist George Papandreou wins a resounding victory in a general election, and becomes prime minister.

Oct 5, 2009: The government says it will cut spending and fight tax fraud to reduce the public deficit from 12.7 per cent of output to 9.4 per cent in 2010, but Papandreou promises to stand by "commitments for more social justice."

Oct 16, 2009: Papandreou warns parliament that the country's finances are in "a state of emergency.

Nov 12, 2009: The government says the state pension system is a "black hole."

Nov 13, 2009: Greece reveals a hidden recession and blames the previous Conservative government for misreporting key economic data.

Nov 20, 2009: Papandreou puts forward a budget to cut the public deficit to 9.1 per cent of GDP to save the economy from the "emergency room."

Dec 9, 2009: Papandreou declares the country to be in a financial crisis and facing the worst threat since the end of military dictatorship in 1974. The debt threatens "national sovereignty" and could "eliminate the country", he warns.

Dec 15, 2009: The world's three main credit ratings agencies, Fitch, Standard & Poor's and Moody's, downgrade Greece's sovereign debt.

Dec 24, 2009: On Christmas Eve, parliament adopts a crisis budget to cut the public deficit to 9.1 per cent of GDP.

Feb 3, 2010: The European Commission gives its approval to Greece's austerity plans and unveils a system of unprecedented controls to monitor progress.

Feb 11, 2010: EU leaders pledge solidarity with Greece at an emergency meeting in Brussels but offer few hints on any potential financial assistance.

Feb 24, 2010: A 24-hour general strike brings Greece to a standstill. Police clash with hundreds of protesters as tens of thousands take to the streets.

Feb 26, 2010: Socialist Prime Minister Papandreou warns that Greece risks possible bankruptcy unless strict austerity measures are implemented.

Mar 3, 2010: Under new pressure from the EU and financial markets, and in the absence of financial help from the EU, the government announces radical further budget cuts to reduce the public deficit to 8.7 per cent of output.

Mar 11, 2010: Greece grinds to a halt as thousands strike work for a second time in two weeks to protest against the government's austerity plan, crippling public transport, health services and shutting schools.

Apr 7, 2010: Greece announces its 2009 fiscal deficit was 12.9 per cent of GDP — 0.2 percentage points above expectations — and fails to reassure investors it can handle its deficit crisis, pushing it closer to a European Union/International Monetary Fund bailout plan. The news sends the euro plunging against the U.S. dollar.

Apr 8, 2010: Markets open lower Thursday as renewed fears that Greece would not be able to fix its financial crisis on its own send the euro lower, dragging commodities down.

Apr 27, 2010: Stock prices worldwide tumble after Standard & Poor's, one of the world's leading credit-rating agencies, cuts the status of Greece's government bonds to the level of "junk."

Meanwhile, the president of the EU says talks on the Greek debt are proceeding. A 45-billion-Euro loan package is being considered, but Germany remains skeptical.

May 5, 2010: Greek prime minister denounces what he describes as the "murder" of three bank workers. They died when during protests against austerity measures.

Despite the protests, the draft bill of the measures aimed at saving the country from bankruptcy is to be voted on Thursday, and is expected to pass.

Nov 2, 2010: A bomb exploded at the Swiss embassy in Athens on Tuesday and police found suspect packages at two other embassies, in the latest wave of parcel bomb attacks in the Greek capital. Police suspect the attacks are linked to Greek leftist guerrillas.

May 21, 2011: Papandreou says Greece must avoid debt restructuring and instead continue with budget cuts to resolve the debt crisis.

June 4, 2011: Papandreou says Greece will make “significant” public-sector employment cuts. Protests continue in central Athens.

Oct 26, 2011: Private investors agree to accept losses of 50 per cent on their Greek bonds, removing the last apparent roadblock to a broad European plan to solve the continent's debt crisis.

Oct 27, 2011: Shares on Greece's stock market rise sharply following a debt deal reached by European leaders.

Nov 1, 2011: Papandreou announces a referendum on the European debt deal. Markets plunge on fears that the plan to save the euro will unravel.

Nov 3, 2011: Papandreou reversed course after a rebellion within his own Socialist party over the referendum, but ignored repeated calls to resign and call elections.

Nov 4, 2011: Papandreou survives a critical confidence vote. The ruling party has a tenuous majority of two in the 300-seat assembly.

Nov 5, 2011: Papandreou struggles to form a temporary coalition government, faced with opposition calls for immediate elections. 

Nov 6, 2011: Greece's government says coalition talks are under way in bid to avoid bankruptcy. Papandreou, mid-way into a four-year term, has promised early elections by March and has said he would be prepared to step aside.

Nov 7, 2011: Rival Greek political parties were hammering out a historic power-sharing deal Monday to secure a €130 billion rescue package, but markets remained wary and European leaders kept up pressure by holding back a vital bailout loan.

Nov 8, 2011: Power-sharing talks between Greece's prime minister and the opposition leader dragged on into Tuesday evening, with senior government officials saying a deal was close and European leaders ratcheting up the pressure for a resolution.  According to government officials, Greece is expected to name a new prime minister.

Nov 9, 2011:  Greek Prime Minister George Papandreou says agreement reached on forming interim government.

Nov 10, 2011: Former European Central Bank Vice-President Lucas Papademos has been named Greece's new prime minister.

Nov 16, 2011: Greece was negotiating with international bankers Wednesday over the details of a €100 billion ($135 billion) writedown of its debt, as the country's new prime minister geared up to win a confidence vote on his coalition government.

Nov 18, 2011: Greece predicted Friday that its budget deficit will fall sharply next year and insisted that no fresh austerity measure will be needed to plug a hole in this year's finances.